Obama swings back at insurers: Ball in their court

Reaction to President Obama’s announcement that he’s changing the rules of health reform has been swift and angry from the insurance industry.

Many individual policy holders, including those with MS, cancer and other expensive conditions, are being dropped by their insurance this fall. They’ve been told it’s because their individual plans don’t meet the “essential benefits” rules of the Affordable Care Act, but many observers suspect insurers are jumping on their last chance to ditch people with expensive chronic conditions.

My colleague Charles Elmore recently described how FloridaBlue is dropping 300,000 policies here that don’t meet the “essential benefits” rules of the ACA. Another 30,000 come from Humana, and 8,700 from Aetna, Charles found.

Today, President Obama said he’s giving insurers permission to continue those plans for another year. Ball now in insurance companies’ court.

“This fix won’t solve every problem for every person, but it’s going to help a lot of people,” Obama said.

The industry is not pleased.

This statement from AHIP – short for America’s Health Insurance Plans – says it all:

“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.”

It’s worth keeping in mind that nationwide, there are only about 5 million people with individual insurance plans, and no more than half are being cancelled. Precise numbers aren’t available.

Meanwhile, the National Association of Insurance Commissioners’ president, Louisiana Insurance Commissioner Jim Donelon, questioned how President Obama’s proposed extensions could even take place at this late hour:

In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues.